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Monday, April 6, 2015

The Law School Social Network

Twitter (2014)Following up on my previous post, Law Prof Twitter Rankings:  Ryan Whalen (Northwestern), The Law School Network & Legal Network Analysis:

I thought I’d start things off with another interactive network and a discussion of networks more generally. The network below (click-through the image for an interactive version) is an alternate projection of the law prof twitter network. I’ve taken the law prof follower relations and changed the unit of analysis to the school that each prof teaches at. This shows us an electronic social network of law schools. Schools that are strongly linked in this network have a lot of profs following one another on twitter. The larger a school’s node, the more influential it is (as gauged by twitter followers) in the law prof social media world.

Twitter Network

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April 6, 2015 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 697

IRS Logo 2Legal Insurrection, Judge Orders IRS to Release Tea Party Target List:

If Bush had done this to liberals, people would be in jail by now.

The Department of Justice may have let Lois Lerner off the hook, but a judge has ordered the IRS to release the names of the Tea Party groups that were singled out for scrutiny. ..

I still enjoy wondering how different this would be if it happened on Bush’s watch. Do you think the media might be more interested?

Hot Air, Judge Orders IRS to Release List of Targeted Conservative Nonprofit Groups:

Lois Lerner didn’t care to speak when she was invited for tea before congressional committees, and it turns out that no charges will be filed against her over her shyness. But that may not be the end of the story for the IRS scandal. A judge in Ohio has consented to a request filed by representatives of several Tea Party groups which calls for the IRS to turn over the full list of conservative groups selected for extra special scrutiny when they filed for nonprofit status. ...

There are several layers to this particular onion. The White House fought back from day one against any such disclosures, saying that releasing the requested information would require exposing private data which the IRS is forbidden to reveal. But that’s only intended to protect individuals, businesses and groups from having all the particulars about their internal business exposed, not the simple fact that they exist and pay taxes. In this suit, rather than asking for all of the numbers, the IRS is simply being asked to provide a spreadsheet containing the identities of the groups under scrutiny. The judge agreed that the case couldn’t be decided without that bare minimum data.

More interesting are the possibilities which follow if the data finally comes to light. If the groups can establish that they all fall under the same umbrella of potential discrimination, they can be bound together in a class action suit. This opens up a range of possibilities, including the hope that the secretive agency will be forced to expose their practices to the public.

Exit question: The Feds are, at this point, refusing to go after Lerner. If this suit succeeds and all of the internal workings of the system are brought to light, including how they selected the groups singled out for “special attention” in the application process, is there another bite at the apple in the offing? Could Lerner wind up back before Congress? And if so, will she just plead the 5th again?

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April 6, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

TaxProf Blog Weekend Roundup

Sunday, April 5, 2015

Dan Markel's Father Speaks To The Media For The First Time About His Son's Murder

MarkelDaily Mail, EXCLUSIVE: 'I Have My Own Theory About Who Killed My Son.' Father of Harvard-Educated Professor Shot in the Head in His Own Garage by Mystery Gunman Finally Speaks Out:

The father of a top law professor who was shot dead at his home has spoken for the first time at his family's 'frustration' that his son's killer has yet to be caught.

It is almost eight months since Dan Markel was gunned down in an execution style killing as he sat in his car in the garage of his home in Florida.

The 41-year-old father of two young sons, who worked at Florida State University, was shot in the head.

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April 5, 2015 in Legal Education | Permalink | Comments (13)

Two William Mitchell Law Profs Sue Over Abrogation of Tenure in Merger With Hamline Law School

MitchellFollowing up on my previous post, William Mitchell and Hamline Law Schools to Merge Amidst Enrollment Declines:  Minneapolis Star-Tribune, Merging Law Schools Causes Tenure Fight at William Mitchell:

Two professors at William Mitchell College of Law have accused the school of proposing unacceptable changes to its tenure policy in order to cut faculty in a planned merger with another law school.

MoyRadsanProfessors Carl Moy and John Radsan filed their complaint Friday in Ramsey County District Court. The complaint asks the court to rule that the school’s attempt to amend its tenure code is a breach of contract. ...

“Defendant’s proposed amendment would alter the tenure code so that it would deny otherwise-tenured faculty ‘tenure’…,” the suit said. “Defendant would be able to terminate a tenured faculty member without adequate cause …”

The professors’ complaint alleges that Mitchell couldn’t find enough faculty to voluntarily retire or take part-time positions in order to cut the school’s staffing in time for the merger, so officials proposed amending its tenure code to facilitate the dismissal of more instructors.

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April 5, 2015 in Legal Education | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

The IRS Scandal, Day 696

IRS Logo 2National Review, Making the Lois Lerner Problem Disappear, by Hans von Spakovsky:

On March 31, Ronald Machen, the outgoing U.S. attorney for the District of Columbia, wrote House Speaker John Boehner to inform him that the Justice Department would not present Lois Lerner’s contempt citation to a federal grand jury.

The letter explaining his decision is an exercise in misdirection—the kind of misdirection that magicians use to fool an audience. Why? Because at no point in his detailed, seven-page legal analysis does Machen mention the most important point demonstrating that Lerner did, in fact, waive her Fifth Amendment right. ...

In the March 31 letter, although acknowledging that the House Committee found that Lerner’s “opening statement was the equivalent of ‘voluntary’ testimony,” Machen concludes that, in declaring her innocence, Lerner did not waive her Fifth Amendment privilege because “case law establishes that Ms. Lerner’s general denials of wrongdoing did not amount to ‘testimony’ about the actual facts under the Committee’s review.”

Having decided that Lerner did not waive her Fifth Amendment privilege, Machen goes on to claim that it is within his discretion not to present the House’s May 7 contempt citation to a federal grand jury. He bases that claim on his reading of a 1984 legal opinion from the Justice Department’s Office of Legal Counsel. That despite the federal law, which provides that, once the House of Representatives has voted to find a witness in contempt, the speaker of the House must certify the matter to the “appropriate United States Attorney, whose duty it shall be to bring the matter before the grand jury for its action” (emphasis added).

Although this is debatable from a legal standpoint, and lawyers can disagree on whether Lerner’s declaration of innocence at the public hearing was or was not testimony that waived her Fifth Amendment privilege, what is not debatable is that there is a gaping hole in Machen’s recitation of the facts and his legal analysis.

According to The Wall Street Journal, right after Lerner’s frustrating March 5, 2014 appearance before the House committee, her lawyer, William Taylor III, told reporters at a press conference that Lerner had given a “lengthy interview” to Justice Department prosecutors “within the last six months, as part of the agency’s investigation into IRS targeting of conservative tea-party groups.” Taylor even admitted that Lerner had freely given DOJ her testimony without getting any promise of immunity from prosecution.

Why is this significant? Because, if Taylor is to be believed, Lerner obviously did not assert her Fifth Amendment privilege when she gave Justice prosecutors a “lengthy interview” about the very subject she had been subpoenaed to discuss with the House Oversight and Government Reform Committee. While the prevailing rule in most federal courts is that a waiver of the Fifth Amendment privilege at one proceeding does not carry through to another proceeding, that is not the rule in the District of Columbia. ...

Ignoring highly relevant, although perhaps inconvenient, facts, outgoing U.S. Attorney Ronald Machen has issued a flawed legal analysis. It reaches an erroneous, but politically expedient, conclusion—one that gives Lerner a pass and further hinders congressional efforts to get to the bottom of this scandal. It’s a pretty slick trick. No wonder Machen’s pulling a disappearing act.

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April 5, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, April 4, 2015

18th Annual Critical Tax Theory Conference Concludes Today at Northwestern

Northwestern (2014)The 18th Annual Critical Tax Theory Conference concludes today at Northwestern:

Critical tax scholarship aims at looking beyond the language of the Code and regulations to examine what the tax law actually does. It has roots in critical legal studies generally, and therefore Critical tax scholars frequently ask why the tax laws are the way they are and what impact tax laws have on historically disempowered groups, such as people of color; women; lesbian, gay, bisexual, and transgendered individuals; low-income and poor individuals; the disabled; and nontraditional families. But Critical tax scholarship is not limited either to those topics or to any particular methodology.

Critical tax scholarship shares the following goals: (1) to uncover bias in the tax laws; (2) to explore and expose how the tax laws both reflect and construct social meaning; and (3) to educate nontax scholars and lawyers about the interconnectedness of taxation, social justice, and progressive political movements. Critical tax scholars employ a variety of methods to achieve these goals such as bringing "outsider" perspectives to the study of tax law; using historical material, contemporary case studies, and personal or fictional narratives to illustrate the practical impact of the tax laws on individuals and groups; interpreting social science and economic data to show how the tax laws impact groups differently; and exploring the interconnectedness of tax laws with economic forces such as the labor market and international financial and political development.

Panel #6:  General Tax Base (Moderator: Alice Abreu (Temple))

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April 4, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (1)

The Economist: America's Flagging Higher Education System

Economist Logo (2015)The Economist, More and More Money Is Being Spent on Higher Education. Too Little Is Known About Whether It Is Worth It:

America’s early and lasting enthusiasm for higher education has given it the biggest and best-funded system in the world. Hardly surprising, then, that other countries are emulating its model as they send ever more of their school-leavers to get a university education. But, as our special report argues, just as America’s system is spreading, there are growing concerns about whether it is really worth the vast sums spent on it.

Economist

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April 4, 2015 in Legal Education | Permalink | Comments (2)

Weekly SSRN Tax Roundup

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April 4, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

The IRS Scandal, Day 695

IRS Logo 2Daily Mail, Tea Party Groups Win Round 1 in Court as Federal Judge Demands IRS's List of All 298 Conservative Nonprofits It Targeted:

  • Right-wing groups want court to let them sue the IRS in a class-action lawsuit for violating their constitutional right to equal treatment
  • IRS applied different criteria to right-wing groups, holding up their applications for years while liberal organizations skated through
  • Obama administration fought the release of a list of 298 groups it denied tax-exempt status beginning in 2010, citing privacy concerns
  • Judge in Cincinnati overruled the government and ordered the IRS to hand over the list
  • If court 'certifies' class-action status, the tea party groups will be free to demand emails, phone records and other documents

Additional press and blogosphere coverage:

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April 4, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, April 3, 2015

L.A. Magazine Profile: Eugene Volokh

VolokhLos Angeles Magazine, Right Side of the Law: Eugene Volokh’s Global Influence:

The wunderkind-turned-law professor is that L.A. anomaly: an influential conservative blogger 

Even though he’s 47, Volokh still exudes a smartest-kid-in-the-classroom vibe. He first came to local prominence when the Los Angeles Times profiled him in 1980 in a feature story that ran under the headline “ ‘Gifted’ 12-Year-Old Math Genius Is UCLA’s Youngest Undergrad.” Now, after two decades as a law professor at his alma mater, he’s emerged as one of the nation’s leading constitutional scholars. He’s also become a leading conservative and libertarian legal theorist, establishing himself as one of the few Angelenos to play a prominent role in hard-right political circles. Volokh writes prolifically—law review articles, op-ed essays, legal textbooks—but it’s his Web presence that has earned him the most recognition. Founded in 2002, The Volokh Conspiracy is among the oldest and most widely read legal blogs in the country. The site’s mainstream reach expanded dramatically after the left-leaning Washington Post started carrying it on its Web site last year, and its impact extends far beyond its 22,500 unique visitors per weekday. Liberal Supreme Court Justice Elena Kagan is said to be a regular reader. ...

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April 3, 2015 in Legal Education | Permalink | Comments (2)

Rutgers Board Approves Merger of Camden, Newark Law Schools, Pending ABA Approval

Rutgers Law SchoolsFollowing up on my previous posts (links below):  Press Release, Rutgers Board of Governors Approves Merger of Two Law Schools with Distinct Locations Pending ABA Approval:

The Rutgers Board of Governors today approved the merger of the two Rutgers law schools into one unified law school with two distinct locations in Camden and Newark, contingent upon  approval by the American Bar Association. ...  ...

Rutgers Law School will employ a robust faculty of 100 scholars. ... With more than 1,000 students drawn from across the country, Rutgers Law School also will be among the nation’s largest law schools, yet it will boast a student-faculty ratio on par with other leading public law schools.

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April 3, 2015 in Legal Education | Permalink | Comments (1)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weil Gotshal's April Fools' Memo Promising Better Work/Life Balance For Associates By Banning Late Night and Vacation Email Backfires

WeilWeil, Gotshal & Manges sent this firm-wide memo announcing an Important New Email Policy on April 1, promising a better embrace work/life balance for associates:

Reports that both France and Germany have either considered or adopted workplace rules that ban emails to employees after their work hours have caused us to examine our own workplace and the impact that being “always on” has on our employees and their families. All studies we have seen point to reduced productivity. The issues are exacerbated in an international firm like Weil where offices span many different time zones. In Europe, there has been discussion of shutting down email for all from 6:00 p.m. to 6:00 a.m. We have decided not to go that far, but effective May 1, 2015, the following rules will be in effect, implemented by software in each office:

(1) Email will not be transmitted between 11:00 p.m. and 6:00 a.m. This will be implemented in the local time zone for each Weil office. This will be the default email setting, subject to opt-outs as described below.

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April 3, 2015 in Legal Education | Permalink | Comments (0)

18th Annual Critical Tax Theory Conference Kicks Off Today at Northwestern

Northwestern (2014)The 18th Annual Critical Tax Theory Conference kicks off today at Northwestern:

Critical tax scholarship aims at looking beyond the language of the Code and regulations to examine what the tax law actually does. It has roots in critical legal studies generally, and therefore Critical tax scholars frequently ask why the tax laws are the way they are and what impact tax laws have on historically disempowered groups, such as people of color; women; lesbian, gay, bisexual, and transgendered individuals; low-income and poor individuals; the disabled; and nontraditional families. But Critical tax scholarship is not limited either to those topics or to any particular methodology.

Critical tax scholarship shares the following goals: (1) to uncover bias in the tax laws; (2) to explore and expose how the tax laws both reflect and construct social meaning; and (3) to educate nontax scholars and lawyers about the interconnectedness of taxation, social justice, and progressive political movements. Critical tax scholars employ a variety of methods to achieve these goals such as bringing "outsider" perspectives to the study of tax law; using historical material, contemporary case studies, and personal or fictional narratives to illustrate the practical impact of the tax laws on individuals and groups; interpreting social science and economic data to show how the tax laws impact groups differently; and exploring the interconnectedness of tax laws with economic forces such as the labor market and international financial and political development.

Panel #1:  Exemptions and Subsidies (Moderator: Evelyn Brody (Chicago-Kent))

  • Neil Buchanan (George Washington), Social Security Is Fair to Future Generations
  • Darryll Jones (Florida A&M), Payments in Lieu of Taxes: The Canary in the Mine of Charitable Property Tax Exemption
  • Richard Schmalbeck (Duke), Declaratory Judgments and Charitable Borders
  • Nancy Shurtz (Oregon) & Maria Di Miceli (IRS), Tax-Exempt Status of Hospitals: Addressing Accountability after the ACA

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April 3, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Law School Ethics

Michael Simkovic (Seton Hall), What “Employment” and “Unemployment” Mean:

Recently, two criticisms have been leveled against law schools.  The first is an economic critique—law school is not worth it financially compared to a terminal bachelor’s degree.  This critique is incorrect for the overwhelming majority of law school graduates.

The second is a moral critique—that law schools behaved unethically or even committed fraud (see here, here, and here) by presenting their employment statistics in a misleading way.  (While at least one of the 200+ American Bar Association (ABA) approved law schools misreported LSAT scores and GPAs of incoming students, and a former career services employee at another alleges specific misreporting of unemployment data at that law school, I am focusing here not on the outliers, but on the critique against all law schools generally).

Deborah Jones Merritt (Ohio State), The Ethics of Academia:

What obligations, if any, do academic institutions owe potential students? When soliciting these “customers,” how candid should schools be in discussing graduation rates, scholarship conditions, or the employment outcomes of recent graduates? Do the obligations differ for a professional school that will teach students about the ethics of communicating with their own future customers? ...

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April 3, 2015 in Legal Education | Permalink | Comments (1)

Ex-IRS Ethics Office Lawyer Disbarred For … Ethics Violations

Washington Times, Ex-IRS Ethics Office Lawyer Disbarred For … Ethics Violations:

A lawyer who worked in the IRS ethics office was disbarred Thursday by the District of Columbia Court of Appeals, which concluded she misappropriated a client’s funds from a case she handled in private practice, broke a number of ethics rules and showed “reckless disregard for the truth” in misleading a disbarment panel looking into the matter.

The lawyer, Takisha Brown, reportedly had bragged that she would never be punished because her boss would protect her, but an IRS spokesman said Wednesday that she was no longer an employee at the agency.

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April 3, 2015 in IRS News, Tax | Permalink | Comments (7)

Grant Funded Legal Research

Michael Simkovic (Seton Hall), Grant Funded Research:

Paul Campos of the University of Colorado is once again confused by my research with Frank McIntyre.  This time, the source of Professor Campos’s confusion is not present value calculations, but rather grant funding.

The Economic Value of a Law Degree was not funded through grants.  No disclosure of grant funding appears in that article because there was no funding to disclose.

Two follow up studies, Timing Law School and an upcoming study about differences in the law earnings premium by college major, race and gender, are funded through grants from Access Group, Inc., a non-profit that provides financial education to students and schools and aims to promote broad access to education, and the Law School Admission Council (LSAC), which is an important provider of data and research about law schools (see here and here). ...

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April 3, 2015 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 694

IRS Logo 2Investor's Business Daily editorial, Lois Lerner Gets Off - Hillary Clinton Breathes Easier:

The Justice Department says Lois Lerner, who used her IRS office to target the Tea Party, didn't waive her Fifth Amendment rights before Congress and won't be prosecuted for contempt over her missing emails. ...

Lois Lerner, poster child for hard-drive crashes and missing emails, won't face charges for contempt of Congress. ... After pleading her innocence at that 2013 hearing, Lerner went on to invoke her Fifth Amendment right to remain silent. This raised the question of whether the Constitution let her remain silent after she was not silent and pleaded her case.

The House decided that no, it doesn't. In May of last year it voted to hold her in contempt of Congress. The Ways and Means Committee went so far as to send the Justice Department a criminal referral with potential charges that could have meant 11 years in jail.

Lerner waived her rights not only when she pleaded her innocence before Congress, but also when she shared with DOJ information she was withholding from Congress.

Hans Von Spakovsky, senior legal fellow at the Heritage Foundation, says government officials can't pick and choose when and where they invoke their Fifth Amendment rights. They can't legally give information to the DOJ that they withhold from Congress. "When Lerner gave a lengthy interview to the government, she waived the Fifth. There's no doubt about it," says Von Spakovsky. "The law is crystal clear here in the District of Columbia."

But not so clear, it seems, to the political wagon circlers at the Justice Department.

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April 3, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, April 2, 2015

Hickman Presents Treasury's Retroactivity Today at Northwestern

Hickman 2014 2Kristin Hickman (Minnesota) presents Treasury's Retroactivity at Northwestern today as part of its Tax Colloquium Series hosted by Lawrence Zelenak:

In Bowen v. Georgetown University Hospital, the Supreme Court described retroactivity as "not favored in the law" and generally rejected allowing federal administrative agencies to adopt regulations "altering the past legal consequences of past actions."  Unlike most regulatory agencies, Treasury and the IRS are expressly authorized by Congress to adopt regulations with precisely such primary retroactive effect.  Specifically, IRC § 7805(b) grants Treasury and the IRS the power to backdate tax regulations under a variety of circumstances.  Preliminary analysis shows that Treasury and the IRS utilize this authority regularly with little judicial oversight for abuse of discretion.  Using empirical data, this article will explore more fully Treasury and IRS utilization of the authority to adopt retroactively effective regulations interpreting the Internal Revenue Code.

April 2, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Lederman Presents Does the IRS Need Reform? Or Does IRS Oversight? Today at DePaul

LedermanLeandra Lederman (Indiana) presents Does the IRS Need Further Reform? Or Does IRS Oversight? at DePaul today as part of its Faculty Workshop Series:

The IRS has a difficult mission and sometimes has failed quite publicly. It last underwent a major structural reform in the late 1990s, in accordance with the Internal Revenue Service Restructuring and Reform Act of 1998. The restructuring imposed major costs on the IRS’s tax collection mission. The reform was spurred in part by horror stories solicited by Congress, to which the IRS could not respond for fear of disclosing confidential taxpayer information. More recently, the IRS did not respond effectively to accusations that it inappropriately scrutinized and delayed the tax-exemption applications of right-wing organizations. Numerous Congressional committees held hearings regarding the alleged targeting, and Congress’s rhetoric was quite partisan.

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April 2, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Feds Place Ave Maria Law School on Financial Watch List

Ave Maria LogoIn the wake of a 45% decline in enrollment at Ave Maria Law School, the Department of Education has placed the school on its Heightened Cash Monitoring list of 560 schools (and the only law school) whose federal aid is restricted because of concerns about their finances or compliance with federal requirements.  From Bar Exam Stats:

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April 2, 2015 in Legal Education | Permalink | Comments (0)

The Historical Origins of the Debt-Equity Distinction

Florida Tax ReviewCamden Hutchison (Wisconsin), The Historical Origins of the Debt-Equity Distinction, 16 Fla. Tax Rev. ___ (2015):

The U.S. tax code favors corporate debt over corporate equity, a distinction long criticized by economists, legal scholars, and other tax commentators as both theoretically and practically unsound. For decades, academics and policymakers from a variety of disciplinary and political backgrounds have argued that this so-called “debt-equity distinction” distorts corporate financing decisions, encourages excess borrowing, and invites troublesome tax-avoidance behavior. Surprisingly, despite widespread critical attention, the origins of this policy remain a mystery. Primarily focused on its contemporary significance, scholars have disregarded the distinction’s past.

This article uses historical evidence to trace the debt-equity distinction’s origins, development, and continuing evolution.

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April 2, 2015 in Scholarship, Tax | Permalink | Comments (0)

Parrillo Reviews Mehrotra's Law, Politics, and the Rise of Progressive Taxation

AjayNicholas R. Parrillo (Yale), Book Review, 101 J. Am. Legal Hist. 1225 (2015) (reviewing Ajay Mehrotra (Indiana), Making the Modern American Fiscal State: Law, Politics, and the Rise of Progressive Taxation, 1877-1929 (Cambridge University Press, 2013)):

This book deserves to be (and, I predict, will become) the standard account of a major transition in the history of American governance: from a tax regime that was predominantly regressive, indirect, and centered on federal customs duties to one far more progressive, direct, and centered on the federal income tax.

Ajay K. Mehrotra's story opens with a survey of American taxation circa 1877. Federal taxation consisted of customs duties on imported goods to protect domestic producers, plus excises on liquor and tobacco. These levies fell (or at least were understood to fall) largely on consumers. At the state and local levels, taxation consisted mainly of a general property tax that nominally covered all property but, in practice, fell on land while allowing financial assets to escape.

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April 2, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Motro: Scholarship Against Desire

Shari Motro (Richmond), Scholarship Against Desire, 27 Yale J.L. & Human. 115 (2015):

How do ego-driven fears and ambitions influence intellectual life in our law schools? How do law review placements, promotion applications, and faculty workshops skew the questions we law professors ask and the conclusions we reach? In my own case, they led me to frame my last project before tenure — which at its heart is about intimate relationships — through a tax policy analysis. Instead of writing about “sex against desire” I wrote about “preglimony.”  [Preglimony, 63 Stan. L. Rev. 647 (2011).]  I stand behind the result, but the exercise also left me feeling incomplete. This article reflects on the price of strategically motivated scholarship and articulates a vision for what a more authentic ethos may bring to students, to the profession, and to the world we help shape.

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April 2, 2015 in Legal Education, Scholarship, Tax | Permalink | Comments (1)

How the Tax Code Hurts Artists

New York Times op-ed:  How the Tax Code Hurts Artists, by Amy Sohn (author and television writer):

With tax day looming, you can practically hear the cries of creative professionals across the country. That’s because the tax code hits many right where it hurts, by penalizing them for the distinctive way they make money.

The biggest offender is still the alternative minimum tax, despite the American Taxpayer Relief Act of 2012, which brought long-overdue reform. Two provisions of the AMT hit a disproportionate number of actors, screenwriters and directors: In calculating it, taxpayers can’t deduct employee business expenses, nor can they deduct state, local and property taxes.

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April 2, 2015 in Tax | Permalink | Comments (3)

Texas A&M Law School Dean's Ten Reasons To Be Cheerful About The Future Of Legal Education

Andrew Morriss (Dean, Texas A&M), Reasons to be Cheerful: The Future of Legal Education:

This is a time of turmoil in legal education, and, to a large extent, in higher education generally.  Enrollment in U.S. law schools has dropped to 1974 levels, yet there are more than fifty additional law schools now. Enrollments have fallen even at highly regarded schools, as illustrated by the announcement from Washington & Lee that it was cutting its entering class size to 100 (which translates into a roughly 25% cut from prior norms), increasing the payout from its endowment to 7.5% (i.e. drawing down principal – unless the university has some truly amazing investment managers who are getting extraordinary returns; a more usual endowment payout is around 4%) to boost revenue, and shrinking its faculty and staff.  Poor employment numbers and rising student debt has caused criticism of law schools for running “scams” to spread on line, while  Brian Tamanaha’s Failing Law Schools sparked discussion about where law schools were headed. These are all stresses on legal education.

It is not easy to be in such a market, but stresses on markets usually force competition to sharpen and I think there is reason to believe that the stresses legal education and the rest of higher education are under will produce an improvement in quality in the long run. That may be small comfort to some in the short run but the opportunities for improved legal education are significant.

My reasons for being cheerful rest on trends we are experiencing as competition has its way even in markets dominated by non-profit service producers. The three big improvements I think we will see will be:

  • Lower tuition and related costs;
  • More attention to the quality of education students receive; and
  • More diversity in methods of legal education.

In short, legal education will be cheaper, get better, and offer more variety in the types of education offered. To see why, let’s look at ten of the trends that will push legal education in that direction. ...

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April 2, 2015 in Legal Education | Permalink | Comments (2)

Marian: Reconciling Tax Law and Securities Regulation

Omri Y. Marian (Florida), Reconciling Tax Law and Securities Regulation, 48 U. Mich. J.L. Reform 1 (2014):

IRS SECIssuers in registered securities offerings are required to disclose, among other tax matters, the expected tax consequences to investors that result from investing in the offered securities (“nonfinancial tax disclosure”). I advance three arguments in this regard. First, nonfinancial tax disclosure practice, as sanctioned by the SEC, does not achieve its intended regulatory purposes. Nonfinancial tax disclosures provide irrelevant information, sometimes fail to provide material information, create unnecessary transactions costs, and divert valuable administrative resources to the enforcement of largely-meaningless requirements. Second, I suggest that the practical reason for this regulatory failure is an unsuccessful attempt by tax practitioners and the SEC to address investors’ heterogeneous tax preferences. Specifically, nonfinancial tax disclosure practice assumes the existence of a “reasonable investor” who is also an “average taxpayer”, and tax disclosures are drafted for the benefit of such average taxpayer. The “average taxpayer”, however, is not a defensible construct. Third, the theoretical reason for the dysfunctionality of the regulatory regime is misapplication of mandatory disclosure theory to tax rules. I argue that given the special nature of tax laws, mandatory disclosure theory — even if accepted at face value — does not support current regulatory framework. To remedy this failure, I describe the types of tax-related disclosures that would be supported by mandatory disclosure theory. Under my suggested regulatory reform, nonfinancial tax disclosure will only include issuer-level tax items, (namely, items at the company level not otherwise disclosed in the financial statements), that affect how “reasonable investors” calculate their own individual tax liabilities. Under such a regime, there is no need to rely on the “average taxpayer” construct.

April 2, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 693

IRS Logo 2On his final day in office as the U.S. Attorney for the District of Columbia, Ronald Machen Jr. sent this 7-page letter to Speaker John Boehner informing him that the Department of Justice will not pursue contempt of Congress charges against Lois Lerner.

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April 2, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Wednesday, April 1, 2015

Repeal, Lawsuit Pose Challenge to FATCA

FATCAWall Street Journal editorial, Checking the IRS Overseas:

Senator Rand Paul this month introduced a bill to repeal Fatca, and a coalition of U.S. taxpayers will soon challenge its constitutionality in federal court. ...

Fatca has created a wave of Americans renouncing their citizenship—a record 3,415 last year, up from 482 on average during the George W. Bush years. A University of Kent study last month concluded that 31% of American expats have considered handing in their passports. “In contrast to what is commonly thought, income is not a key factor,” the study found. More significant are “increasing reporting requirements, fears of ‘draconian’ penalties and increasing inability to hold a bank account.”

For all these costs, Fatca promises little benefit to Washington, unless you think hiring 800 new IRS agents is progress. Even the Obama Administration says the law would capture only $870 million a year in additional tax revenue, which is probably overstated given changes in behavior by Americans and their overseas employers.

Mr. Paul has some backing in the House for his repeal effort, but American expats vote across the 50 states and have little muscle in Congress. Most U.S. residents may not realize that the U.S. is the only developed country that taxes its citizens at U.S. rates no matter where they reside and earn income.

The other challenge to the law is a court case to be filed in May by plaintiffs supported by Republicans Overseas, including Roger G. Johnson, a retired U.S. Army major living in the Czech Republic, and Marc Zell, a lawyer in Israel. Among their claims: Fatca violates Fourth Amendment privacy rights and Eighth Amendment protections against “excessive fines.”

April 1, 2015 in Tax | Permalink | Comments (1)

Ohio State's New Logo: Everything Is for Sale!

Ohio StateChronicle of Higher Education op-ed:  Welcome to Ohio State, Where It Is All For Sale, by Steven Conn (Department of History, Ohio State):

I'm excited to announce that my university has changed its motto. Out with the old and in with: “Omnia Venduntur!

Our old motto, “Disciplina In Civitatem,” or “Education for Citizenship,” just sounded so, you know, land-granty, so civic-minded. It certainly doesn’t capture our new ethos of entrepreneurial dynamism and financial chicanery. ...

So instead: “Everything Is for Sale!” (Actually, the trustees originally wanted to carve “Every Asset a Monetizable Asset” into stone, but it turns out “monetizable” doesn’t have a Latin translation.)

We’ve been moving in this direction for some time. We were among the first to become a “Coke campus,” which means that in ex-change for some cash, we’ve agreed that Coke and Coke products are the only soft drinks permitted on campus. ...

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April 1, 2015 in Legal Education | Permalink | Comments (0)

Robson: Enhancing Reciprocal Synergies Between Teaching and Scholarship

Ruthann Robson (CUNY), Enhancing Reciprocal Synergies between Teaching and Scholarship, 64 J. Legal Educ. 480 (2015):

This essay confronts the canard that one can be a good law teacher or a good legal scholar, but not both. It contends that many legal academics are good teachers and scholars, even as increasing demands can make institutional and individual balancing acts difficult. This essay first considers the empirical studies about the relationship between teaching and scholarship in legal academia. It then turns toward the experiential, with the simple overarching suggestion that individual legal academics can enhance the synergies between our scholarly and pedagogical endeavors by paying attention to them. The essay highlights four categories — the doctrinal, the theoretical, the methodological, and the professional — and discusses ways to strengthen their mutually reinforcing aspects. The essay ends by offering three techniques to assist legal scholars and teachers in paying attention regardless of the category and thus enhance the reciprocal synergies between scholarship and teaching.

April 1, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

NY Times Debate: How to Improve the College Admissions Process

NY Times Room for DebateNew York Times Room for Debate, How to Improve the College Admissions Process:

The Times columnist Frank Bruni’s new book, “Where You Go Is Not Who You’ll Be,” appeals to teenagers and their parents to relax, because the college decision won’t matter as much as they think it will. But as those thin and thick envelopes arrive in mailboxes across the country, don’t colleges and universities share some of the responsibility for the absurd competition?

What can selective colleges and universities do to improve the admissions process?

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April 1, 2015 in Legal Education | Permalink | Comments (2)

Miller: Medicaid Spend Down, Estate Recovery and Divorce

John A. Miller (Idaho), Medicaid Spend Down, Estate Recovery and Divorce: Doctrine, Planning and Policy, 22 Elder L.J. ___ (2015):

Medicaid is the need based government program that pays for much of the health care for the poor in the United States. Medicaid often ends up paying the costs of nursing home care for middle class seniors who have descended into poverty as a result of the high costs of such care. For married couples Medicaid requires “spend down” of both spouses’ assets before one spouse can qualify for Medicaid support. This article posits that, unless the law is changed, divorce may well become standard Medicaid planning practice in many circumstances. This will be especially true for middle and upper middle class married couples because they have the most to gain from divorce in this context. It argues that Medicaid’s approach toward married couples is based on a narrow and outmoded image of marriage. It assumes a marriage where the spouses have enjoyed a long life together, have common intended beneficiaries, have no other person to whom they have an equal or greater commitment, and it assumes a high level of commitment to the institution of marriage itself. This view of marriage tends to not fit the modern landscape where the marriage one inhabits in old age may be of newer vintage and may not include children of the marriage. Added to this is the trend toward “de-institutionalization” of marriage. The article contends that as marriage becomes less sacred in our society the utility of divorce as a Medicaid planning strategy will outweigh its moral repugnance. This is especially true because in this context divorce does not require ending or even substantially changing the day to day relationship of the parties. It simply becomes a rational asset protection plan.

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April 1, 2015 | Permalink | Comments (0)

NY Times: Law Schools and Legal Industry Show Signs of Life, Despite Forecasts of Doom

NY Times Dealbook (2013)New York Times Deal Book:  Law Schools and Industry Show Signs of Life, Despite Forecasts of Doom, by Steven Davidoff Solomon (UC-Berkeley):

Law school enrollment has plummeted to the lowest level in decades. If a bottom has been reached, is now a good time to go to law school?

Some say no — not now and possibly never. The legal market, they argue, has fundamentally changed, meaning that many of the legal jobs of years past are gone forever.

Several new studies, however, point to signs of vigorous life in the legal job market, at least toward the higher end.

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April 1, 2015 in Legal Education | Permalink | Comments (7)

Does Professor Who Is Denied Tenure Have The Right To See Student Evaluations Of Her And Her Colleagues?

PomonaChronicle of Higher Education, Court Battle Over Tenure Denial Centers on Privacy of Student Evaluations:

Should the confidentiality shrouding students’ evaluations of college instructors always be protected, even if it might conceal violations of the law? A California state court was expected to take up that question last week in response to Pomona College’s refusal to grant access to such records to a former professor suing the college for discrimination.

Lawyers for Alma Martinez, to whom the private college denied tenure and who was dismissed as an assistant professor of theater in 2013, are seeking copies of students’ evaluations not only of Ms. Martinez but also of faculty members who, unlike her, received tenure at Pomona in recent years.

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April 1, 2015 in Legal Education | Permalink | Comments (0)

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April 1, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

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April 1, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 692

IRS Logo 2Bloomberg, IRS Chief Says Agency’s High-Profile Mistakes Are Behind It:

The IRS has fixed its errors, such as improper extra scrutiny of Tea Party groups, and they won’t happen again, the tax agency’s commissioner said Tuesday.

“The changes are so significant throughout the agency that you could hang a sign out at the front of the headquarters saying ‘Under New Management,’” Internal Revenue Service Commissioner John Koskinen said in a speech at the National Press Club in Washington.

The IRS has imposed limits to prevent problems such as overspending on conferences and videos, and inappropriate scrutiny of politically oriented nonprofit groups, he said.

“The problems do come from a prior era. We have addressed them so we think they won’t happen again,” he said. “It really is a new day at the IRS. It’s not the IRS of 2010, 2011 or even 2012.”

To bolster his point, Koskinen said 46 percent of the agency’s executives -- including two-thirds of the senior leadership team -- have left since October 2011. While the IRS is a large agency and will always have some problems, the key is to find and address them quickly, he said.

Congress has been investigating the IRS and restricting its budget since May 2013, when the agency revealed it had given extra scrutiny to the applications of Tea Party groups seeking tax-exempt status. Other issues -- including lavish conferences, an embarrassing Star Trek-themed video and bonuses paid to tax-delinquent employees -- emerged after that.

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April 1, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, March 31, 2015

Hayashi Presents Phantom Income and the Simple Economics of Paying In Kind Today at Georgetown

HayashiAndrew T. Hayashi (Virginia) presents Taxing Committed Consumption and the Simple Economics of Paying in Kind at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John BrooksItai Grinberg, and David Schizer:

This article explores the effects of taxing committed consumption, that is, consumption which can only be adjusted at a cost. Two examples of committed consumption, housing services from homeownership and future consumption from savings, make up a significant share of many households’ consumption profile. In the presence of adjustment costs, the form in which a tax is remitted—whether the tax is paid “in kind” or not—affects both behavioral responses to and welfare effects of the tax. My analysis quantifies and evaluates these effects, which have been introduced in many tax policy contexts under the heading of taxpayer liquidity concerns. These concerns have shaped tax law and loom large in current debates about wealth taxation, tax accounting, and mark-to-market reforms, but have not been analyzed for their welfare effects.

March 31, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Oei Presents Can Sharing Be Taxed? Today at NYU

OeiShu-Yi Oei (Tulane) presents Can Sharing Be Taxed?, 93 Wash. U. L. Rev. ___ (2016) (with Diane M. Ring (Boston College)), at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Viard:

The past few years have seen the rise of a new model of production and consumption of goods and services, often referred to as the “sharing economy.” Fueled by startups such as Uber and Airbnb, sharing enables individuals to obtain rides, accommodations, and other goods and services from peers via the Internet or mobile application in exchange for payment. The rise of sharing has raised questions about how it should be regulated, including whether existing laws and regulations can and should be enforced in this new sector or whether new ones are needed.

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March 31, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Growth in Lawyer Employment

Michael Simkovic (Seton Hall), The Absence of Evidence for Structural Change: Growth in Lawyer Employment and Earnings:

There have been a lot of doom-and-gloom reports about layoffs and collapsing job opportunities for lawyers.  As we’ve noted before, the relevant question for valuing legal education is the boost to earnings from the law degree across occupations, not the more specific question of what is happening to lawyers, or even more specifically, big law firms. 

But for the sake of argument, focusing more narrowly on the under-inclusive category of lawyers only, what does the data actually show about lawyer employment?  ... Lawyer employment is growing.  This is true both in absolute numbers, and also relative to overall employment.  In other words, lawyers are becoming a larger share of the U.S. workforce. 

Simkovic 1

The practice of law is also becoming more lucrative, at least over the long term.

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March 31, 2015 in Legal Education | Permalink | Comments (5)

The Bipartisan Push For Consumption Taxes As Path For Tax Reform

Wall Street Journal, Tax Proposals Would Move U.S. Closer to Global Norm; Proposals For a Consumption Tax Gain Traction in Both Parties:

U.S. lawmakers on both sides of the aisle increasingly are finding appeal in an ambitious concept for overhauling the nation’s income-tax system: a tax based on consumption, a tool long used around the world.

The tax-writing Senate Finance Committee is giving new consideration to the consumption-tax idea with the hope that its promised boost to economic growth would ease the way to a revamp.

As lawmakers have examined a tax overhaul, “it becomes extremely difficult to see a political path to accomplish it” within the confines of the current income-tax system, said Sen. Ben Cardin (D., Md.), co-chairman of a Finance Committee working group negotiating a possible overhaul of business taxes. As a result, the idea of a consumption tax “is getting a great deal more respect, and it is in the discussions,” he said.

Mr. Cardin introduced legislation last year to create a type of consumption tax known as a value-added tax and at the same time lower business taxes and scrap income taxes completely for lower-income Americans.

Republicans on the working group also are interested in the concept, including a proposal put forward recently by GOP Sens. Marco Rubio of Florida and Mike Lee of Utah. That plan would make several changes to the tax code that would move the nation closer to a consumption-based system. ...

The talks open up a possible new direction in slow-moving discussions about rewriting the U.S. tax system. Enactment of a broad-based federal consumption tax would align the U.S. with a global trend. In the U.S., most of those taxes now are in the form of state and local sales taxes.

WSJ

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March 31, 2015 in Congressional News, Tax | Permalink | Comments (3)

Andrew Sullivan: Blogging Nearly Killed Me

SullivanCNN, Andrew Sullivan: Blogging Nearly Killed Me:

For years, Andrew Sullivan blogged at a prolific rate. ... "The truth is, I had to stop primarily because it was killing me," Sullivan said Sunday night at the 92nd Street Y in Manhattan. "I used to joke that if blogging does kill someone, I would be the first to find out."

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March 31, 2015 in Legal Education, Tax | Permalink | Comments (0)

Robin Williams Left Publicity Rights (Restricted For 25 Years) to Charity, Avoiding IRS Dispute Embroiling Michael Jackson's Estate

WilliamsHollywood Reporter, Robin Williams Restricted Exploitation of His Image for 25 Years After Death:

[O]ne of the more innovative aspects of Robin Williams' estate planning ... might just might become a model for other celebrities preparing for their demise. ... According to a review of the Robin Williams Trust — filed as an exhibit last Wednesday — Williams bequeathed rights to his name, signature, photograph and likeness to the Windfall Foundation, a charitable organization set up by Williams' legal reps at the law firm of Manatt, Phelps.

There are two important facets of this provision.

First, the Trust restricts exploitation of Robin Williams' right of publicity for 25 years after his death. ...

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March 31, 2015 in Celebrity Tax Lore, IRS News, Tax | Permalink | Comments (0)

NY Times: Income Inequality Is Also Bad for Your Health

New York Times, Income Inequality: It’s Also Bad for Your Health:

We know that living in a poor community makes you less likely to live a long life. New evidence suggests that living in a community with high income inequality also seems to be bad for your health.

A study from researchers at the University of Wisconsin Population Health Institute examined a series of risk factors that help explain the health (or sickness) of counties in the United States. In addition to the suspects you might expect — a high smoking rate, a lot of violent crime — the researchers found that people in unequal communities were more likely to die before the age of 75 than people in more equal communities, even if the average incomes were the same.

NY Times 1

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March 31, 2015 in Tax | Permalink | Comments (1)

Sign Up For An Account At IRS.gov Before Crooks Do It For You (And Steal Your Refund)

RefundKrebs on Security, Sign Up at irs.gov Before Crooks Do It For You:

If you’re an American and haven’t yet created an account at irs.gov, you may want to take care of that before tax fraudsters create an account in your name and steal your personal and tax data in the process. ...

The IRS’s process for verifying people requesting transcripts is vulnerable to exploitation by fraudsters because it relies on static identifiers and so-called “knowledge-based authentication” (KBA)  — i.e., challenge questions that can be easily defeated with information widely available for sale in the cybercrime underground and/or with a small amount of searching online.

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March 31, 2015 in IRS News | Permalink | Comments (3)

Joint Tax Committee: Overview Of The Federal Tax System

The Joint Committee on Taxation yesterday released Overview Of The Federal Tax System As In Effect For 2015 (JCX-70-15):

The current Federal tax system has four main elements: (1) an income tax on individuals and corporations (which consists of both a “regular” income tax and an alternative minimum tax); (2) payroll taxes on wages (and corresponding taxes on self-employment income) to finance certain social insurance programs; (3) estate, gift, and generation-skipping taxes, and (4) excise taxes on selected goods and services. This document provides a broad overview of each of these elements. 

JCT

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March 31, 2015 in Congressional News, Tax | Permalink | Comments (0)